Inflation, useless bug in the game.

[malkindav]

From what I know in economics (I have to admit that I don't know that much) one of the way in which inflation happens is when a country starts spending money that they don't have. In such situation country might start printing money which they cannot assure (minting) so the value of the currency falls downs and this process called inflation (at least one of the ways).
Here comes my question. Why if i distribute my annual budget ,of the money that I did collected from taxes and from trade, between different state needs and one of the needs is general budget (military needs, constructions, etc.) it causes inflation? I am spending money that I do have and I investing my budget in the state needs. I am not printing money that I don't have or cannot collect. I understand that PS trying to assure that the game would have a different type of challenge but this challenge is absolutely bullocks (sorry for my french). I think that PS should have thought of another way to make inflation or think of other ways to make an economical challenges.

 

[unmerged(465279)]

From the wiki; One way to imagine it is to consider "monthly income" to be a representation of economic activity, not government income. The "treasury" slider allows the government to mint money, but that new money destabilizes price levels and "crowds out" private economic activity and natural economic development.

 

[grumphie]

i dont think you understand both the time period and the game correctly. in those times, all money was worth as much as the components. if the gold in a coin was worth 10 dollar, the coin was worth 10 dollar. only later on this started to change with a gold standard behind money. you couldnt print out money in any way.

second, minting isnt the government just saying that we wont spend that as we need it somewhere else, youre cutting on investments in the economy distorting the economical balance. youre SUPPOSED to be in the - in monthly income unless youre seriously rich. its the census tax the state lived on those time. see it more like the entire + and - of the state and general economic health of the realm. if the government suddenly stops funding all sorts of things, the balance IS going to be upset, resulting in higher prices. youre not just putting money in the treasury, youre collecting your nations income and all that gold is lost from the economy. result? inflation.

 

[grommile]

i dont think you understand both the time period and the game correctly. in those times, all money was worth as much as the components. if the gold in a coin was worth 10 dollar, the coin was worth 10 dollar. only later on this started to change with a gold standard behind money. you couldnt print out money in any way.

The practice of currency debasement (blending base, or at least less-valuable precious, metal into your coins to get more coins from the same amount of gold) dates back to (at least) the Roman era.

 

[Plasma Doctor]

Well, you'll be happy to know that inflation is not going to function from minting as it does now in EU4.

 

[Musthavename]

If you really hate inflation... just play with it off.

I wouldn't though (well, altering the difficulty so the AI doesn't suffer it is understandable). Either you'll end up abusing it not being there and make the game too easy, or you'll inadvertantly shoot yourself in the foot in tech terms.

 

[AdkEric]

The practice of currency debasement (blending base, or at least less-valuable precious, metal into your coins to get more coins from the same amount of gold) dates back to (at least) the Roman era.

Indeed.

I actually think Paradox did a good job with how they handled inflation in EU3 given the way they did the economy and tech. They are completely overhauling the tech and econ part of the game for EU4 so the inflation mechanics will be changing as well.

 

[Lord Dakier]

I just think it sucks how long it takes to come down. Way too long in my opinion.

 

[Pewt]

I just think it sucks how long it takes to come down. Way too long in my opinion.

So don't accumulate a bunch then. It goes down as fast as it goes up.

 

[Lord Dakier]

No it goes up about 20x faster than it goes down. Sometimes your forced to mint as it's for the best of your economy.

 

[chgrogers]

No it goes up about 20x faster than it goes down. Sometimes your forced to mint as it's for the best of your economy.

What time period are we talking about here. From 1399 to 1600 my inflation keeps going up and will usually peak around 5%. After 1600 my treasury starts filling up and I turn down minting to 0 and Only turn it back up when I run out of money. Once inflation has dropped about 1/2 I lose my MoM and replace him with an economic adviser.

Short term the first 200 years it is hard for inflation to drop. Long term it peaks during the 1600s and there will be none from 1700s on.

 

[Lord Dakier]

Well I'm talking more short-term. I only use it when I need to eradicate loan deficits.

That only occurs after a major, major war.

 

[grumphie]

The practice of currency debasement (blending base, or at least less-valuable precious, metal into your coins to get more coins from the same amount of gold) dates back to (at least) the Roman era.

where do i say currency didnt get worth less? it was simply tied to the amount of gold and all you had and you minted money with that. its impossible for a realm with no gold to magically print out money. bad managment can still lead to inflation.

 

[malkindav]

where do i say currency didnt get worth less? it was simply tied to the amount of gold and all you had and you minted money with that. its impossible for a realm with no gold to magically print out money. bad managment can still lead to inflation.

Actually Chinese Song dynasty tried to print banknotes money as early as 11th century, afterwards both Yuan and Ming dynasties tried to do the same. All those experiments ended up pretty badly because it was to ahead of its time.
But this is completely out of the subject. Historically countries did made up money by printing or forging when they didn't had enough money to pay for their wars.
In EU3 transfer of the budget from R&D to general budget shouldn't be called minting and definitely should cause inflation. When in game you see your income from provinces that means that a tax collector came from that provinces with certain amount of ducats and I as a ruler can decide what I want to do with the money that I just received. As a ruler I can invest them into research or into infrastructures or into army budget. As long as I stay within my collected taxes it is not an inflation. If I would exceed my income and would try to balance my budget by adding new money that does not support its worth in gold (accordingly to that era) and not by loaning money from my neighbors that should cause an inflation.
Of-course I can start the game without an inflation but now I am stuck in mid game building nice state and i cannot turn off the inflation (if anyone knows how I can do this inside the savegame file please help) and my argument is that the inflation mechanism in this game is a totally wrong mechanism and it should be improved in 5.2 patch.
I believe that PS agrees with me because inflation should be different in EU4. My question is why it shouldn't be improved in this games patches.

 

[Pewt]

No it goes up about 20x faster than it goes down. Sometimes your forced to mint as it's for the best of your economy.

If it's going up 20x faster it means you're minting 20x more than you're burning. If you could burn money at the rate you were minting it, you'd be horribly in the negative per year.

 

[Lord Dakier]

Oh yes of course, yet who realistically can settle their loan debts from positive minting? Maybe with the national bank NI and MoM it may be possible.

 

[Pewt]

Oh yes of course, yet who realistically can settle their loan debts from positive minting? Maybe with the national bank NI and MoM it may be possible.

Don't overspend in the first place. It's perfectly possible to maintain low or 0 inflation despite heavy spending if you manage your economy properly. There are extreme situations where heavy minting is necessary, but they are very much the exception, not the rule.

 

[Lord Dakier]

Yeah and one of those is in the middle of a do-or-die war which in eastern Europe happens often.

 

[DABegley]

Almost any Byz game requires massive minting and multiple loans. There is almost no other way to survive. You need to build up before the Ottos attack, after is way too late. Current game, 5.2 normal difficulty, I took two loans and minted 100% for years and barely won the fight. Minted until I could pay off the loans and was left with 10% inflation. Not optimal but if it's inflation or death you do what you have to do. Outside of small nation wars of survival I generally keep a very low inflation if not 0. Any time I play a trade nation I never have inflation.

 

[Lord Dakier]

Precisely my point. In my Byz campaign the Ottoman and Mamaluke's joined up with the rest of asia minor to go against me. My vassals, Poland and Hungary saved me multiple times.